Kapalua Bay Villas and Polo Beach Club Case Study
With the Maui real estate market showing signs of improvement through various metrics and demand on the reduced inventory putting upward pressure on prices, potential buyers must be diligent in finding a property that best meets their needs while providing a good value. So with that, it’d be a good time to dig a bit deeper on a couple of comparable properties on Maui. To make it interesting, we chose one in West Maui and one in South Maui.
As a perennial favorite among West Maui visitors, Kapalua Bay Villas enjoys a reputation as a one of the better values in Hawaii oceanfront properties. Nestled among 16 acres of prime Maui real estate, owners and visitors enjoy exclusive use of three pools, tennis courts, a recreation area, and one of the most enviable locations in the world, with unobstructed views of the Pacific. With one hundred and forty units range in size from 1 bedroom / 1 bathroom (1,006 square feet) all the way to incredibly spacious 2 bedroom / 3 bathroom (1,547 square feet), potential buyers are sure to find the perfect size.
So how has Kapalua Bay Villas performed through the cycles of the market? Look at the chart below which shows its ascent of average/median sales prices during the peak of the market to its current position through 2011. To give it some perspective, in 2011 there were 8 sales at a price per square foot of $745.91. Yet in 2002, 16 sales reflected a price per square foot of $805.54. Few other vacation-rentalable, waterfront properties in Hawaii offer this type of opportunity.
Kapalua Bay Villas Sales Chart
Now let’s compare it to one of Wailea’s most sought-after properties, Polo Beach Club. Being directly beachfront on one of the most beautiful beaches in Hawaii, it has a very loyal following of return visitors and happy owners. Consisting of seventy one 2 bedroom / 2 bathroom units on a 8 story concrete building, Polo Beach Club has very few comparables on South Maui and represents one of the strongest beachfront values in Wailea/Makena. Take a look at the chart below to ascertain its values during and after the peak of the market. Clearly this demonstrates a different trend in values than that of Kapalua Bay Villas.
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Polo Beach Club Sales Chart
*Note: No Sales took place in 2009*
So what to make of the above? Does it mean that Kapalua Bay Villas is not as desirable as Polo Beach? No, far from it. The point is that the Maui real estate market is extremely segmented and offers a plethora of micro-markets, each experiencing different levels of valuation and potential appreciation. For buyers waiting for the ‘bottom to fall off’, various metrics point to a recovering market and it is in their best interest to contact a local real estate professional who can better gauge current trends.
Good price-trend information here, and the format with the graphs is interesting. When I see average and median trends, it always makes me wonder whether the market, as a whole, is closely following the lines, or are lower-priced properties just selling more often? In any case, contacting a local real estate pro is good advice.
We had a place at the Ironwoods and took a small hit with that sale but that was buying at 2005 prices and selling at 2010 prices. We still keep a place at the Ridge. The rentals still are healthy enough to stay in the black.
Aloha Bruce,
Thanks for commenting. Have you seen the vacation rental marketing softening/staying the same/getting better in the past year for your property? With high season in full swing, occupancy rates have been through the roof in Hawaii and Maui is enjoying the best year-over-year improvement.
Alex
Great way to present the data and compare the data. Your point about hiring a local agent is key. Hiring someone with the knowledge of the local area can be very beneficial to the buyer.